EXHIBIT 10.23.A


 


EMPLOYMENT CONTRACT


 


	
  THE STATE OF TEXAS

  	
  §

  	
   

  
	
   

  	
  §

  	
  KNOW ALL MEN BY THESE PRESENTS:    

  
	
  COUNTYY OF MIDLAND

  	
  §

  	
   

  



 


THIS EMPLOYMENT CONTRACT
(“Agreement”) is made and entered into on or as of the 12th day of September,
2001 and the initial term of this Agreement and all other terms and provisions
herein, except for the amount of salary, are effective beginning as of the 3rd day of August, 1992
when CAP ROCK ELECTRIC COOPERATIVE, INC. and ULEN A NORTH, JR. entered into an
Employment Contract.  This Agreement
modifies, amends and supercedes the Employment Contract entered into between
CAP ROCK ELECTRIC COOPERATIVE, INC. and ULEN A. NORTH, JR. on August 3, 1992,
which Employment Contract has been transferred to and assumed by CAP ROCK
ENERGY CORPORATION.


 


By this Agreement, CAP ROCK
ENERGY CORPORATION, referred to in this Agreement as “Company”, acting by and
through its Chief Executive Officer, David W. Pruitt, hereinafter referred to
as “Pruitt”, employs ULEN A. NORTH, referred to in this Agreement as “North”,
and whose principal place of employment is Midland, Midland County, Texas who
accepts employment on the following terms and conditions:


 


ARTICLE
1


TERMS
OF EMPLOYMENT


 


By this
Agreement, the Company, acting by and through and under the direction of
Pruitt, employs North and North accepts employment with the Company for an
initial term of two (2) years.  Unless a
written notice to terminate this Agreement is executed and properly delivered
by either party prior to an anniversary date and subject to a satisfactory
evaluation by Pruitt of North on the annual employee appraisal, this Agreement
shall annually and automatically be renewed for an additional term of two (2)
years.  This Agreement may, however, be
terminated earlier, as provided in Article 4, below.


 


ARTICLE
2


EMPLOYMENT
COMPENSATION & BENEFITS


 


2.01         As
compensation for all services rendered under this Agreement, North shall be
paid by Company a salary of $106,614.12 per year, or any greater amount of
compensation including bonuses, fees and deferred compensation authorized by
the wage and salary plan or Board policies authorized by the Company, together
with an annual salary adjustment in an amount at least equal to any approved
across the board salary adjustments for all employees.


 


2.02         North
shall receive the same annual leave and sick leave and all other benefits as
are accorded regular full-time employees of the Company including provisions
governing accrual and payment therefore on early retirement or other methods of
employment.


 


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2.03         Subject
to the above paragraph 2.02, all provisions of the Company’s rules and
regulations relating to annual leave (vacation), sick leave, early retirement,
insurance, savings, deferred compensation, bonuses, pension program
contributions, holiday and other fringe benefits and working conditions as they
now exist or hereafter may be amended, shall apply to North as they would to
other employees of the Company.


 


2.04         Because
North’s duties will from time to time require him to work outside of, and in
addition to, the Company’s established normal work week, work days and work
hours, North shall be allowed to take compensatory time off.


 


ARTICLE
3


COVENANT
TO PERFORM


 


3.01         North
agrees and covenants to perform his work and services diligently and use his
best efforts to faithfully comply with all of the assignments duly made to him
on behalf of the Company by Pruitt.


 


ARTICLE
4


TERM
AND TERMINATION


 


4.01         The
Company shall employ North pursuant to this Agreement for the two (2) year term
beginning on the effective date of his employment hereunder, yearly renewable
subject to and following a satisfactory evaluation employee appraisal report on
North by Pruitt, for successive two year terms.  However, if during such employment, North fails or refuses to
perform the work and services assigned to him on behalf of the Company by
Pruitt, or should he become derelict in so performing, or become unable to
perform, or otherwise become in substantial breach of this Agreement all as may
be determined by Pruitt in his sole discretion or otherwise so act as to give
the Company good cause, this Agreement shall, at Pruitt’s sole option, cease
and terminate and any of North’s rights hereunder not already finally vested
shall cease on or at such time as Pruitt shall notify North in writing.  The term “good cause” shall mean the
following and not otherwise:


 


(1)           Knowingly, willfully and substantially,
during the term of this Agreement, neglects the duties that North is required
to perform under the terms of this Agreement.


 


(2)           Knowingly, willfully and substantially,
during the term of this Agreement, commits clearly dishonest acts toward the
Company with the intent to injure or damage the Company.


 


4.02         If
North’s employment terminates for any reason other than as provided for in
paragraphs 4.01, 4.03, 4.04 or 4.05 herein, the Company shall pay North a
lump-sum cash settlement equal to the total salary then in effect for the two
(2) year term of the contract, plus the amount the Company would have paid for
during such period for North’s retirement-pension plans, and


 


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health insurance, plus such
amounts, if any, are at the time of his termination of employment, payable for
accrued but untaken vacation and sick leave, compensatory time, bonuses and
other compensation authorized by the Board of Directors.


 


4.03         Notwithstanding
paragraphs 4.01 and 4.02, this Agreement and North’s employment hereunder may
be terminated at such time and upon such terms and conditions as the parties
may mutually agree.


 


4.04         Notwithstanding the
provisions of paragraphs 4.01, 4.02, and 4.03 herein, North’s employment
hereunder shall terminate under any of the following conditions:


 


(1)           Death. 
North’s employment under this Agreement shall terminate automatically
upon his death.  In such event, North’s
Base Salary shall continue to be paid to his designated beneficiary for the
remaining term of this Agreement.


 


(2)           Total Disability.  The Company shall have the right to terminate this Agreement if
North becomes Totally Disabled.  For
purposes of this Agreement, “Totally Disabled” means that North is not working
and is currently unable to perform the substantial and material duties of his
position hereunder as a result of sickness, accident or bodily injury for a
period of three months.  Prior to a
determination that North is Totally Disabled, but after North has exhausted all
sick leave and vacation benefits provided by the Company, North shall continue
to receive his Base Salary, offset by any disability benefits he may be
eligible to receive, for the remaining term of this Agreement.


 


4.05         Not withstanding any
other provisions in this Agreement, if (i) North remains employed until the
date that is three (3) months after the date of a Change in Control (the
“Retention Date”), or (ii) North’s employment is terminated after or in
anticipation of a Change in Control (or the execution of a definitive agreement
providing for actions which, if completed, would constitute a Change in
Control) and before the Retention Date (A) by the Company without Good Cause or
(B) by North for Good Reason, then, in addition to any other amounts payable
pursuant to this Agreement, the Company shall pay North a lump sum cash payment
within thirty (30) days of termination equal to six (6) times the sum of
North’s annual Base Salary and the greater of (x) the highest bonus awarded to
North in a prior year or (y) 50% of North’s annual Base Salary.


 


For purposes
of this Agreement “Change in Control” means (i) a reorganization or merger of
the Company with or into any other company which will result in the Company’s
stockholders immediately prior to such transaction not holding, as a result of
such transaction, at least 50% of the voting power of the surviving or
continuing entity or the entity controlling the surviving or continuing entity;
(ii) a sale of all or substantially all of the assets of the Company to an
entity in which the Company’s stockholders immediately prior to such sale will not
hold following such sale at least 50% of the voting power of such purchasing
entity, (iii) a transaction or series of related transactions which result in
more than 50% of the voting power of the Company being “beneficially owned” by
a single “person” (quoted terms having their respective meanings under Section
13(d) and 14(d) under the Securities Exchange Act of 1934, as


 


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amended); (iv) a change in the
majority of the Board not approved by at least two-thirds of the Company’s
directors in office prior to such change or (v) the adoption of any plan of
liquidation providing for the distribution of all or substantially all of the
Company’s assets.


 


For purposes
of this Agreement, after a Change in Control, “Good Reason” shall mean the
occurrence of any one of the following circumstances without North’s consent:


 


(1)           a material reduction in North’s salary or
benefits excluding the substitution of substantially equivalent compensation
and benefits;


 


(2)           a material diminution of North’s duties,
authority or responsibilities as in effect immediately prior to such
diminution;


 


(3)           the relocation of North’s primary work
location to a location more than 50 miles from North’s primary work location as
of the date of this Agreement; or


 


(4)           the failure of a successor to assume and
perform under this Agreement


 


4.06         In the event North is
eligible to receive a lump sum payment pursuant to this Agreement and such lump
sum payment would cause North to be subject to an excise tax in excess of
normal income taxes on such lump sum, then and in that event, the lump sum
payment shall be increased (grossed up) in an amount sufficient to pay such
excise tax.


 


ARTICLE
5


SUPERSESSION
AND EFFECTIVENESS


 


5.01         This
Agreement supercedes any other agreement or understanding, written or oral,
between the parties with respect to the matters covered hereunder, and it
contains the entire understanding of the parties and all of the covenants and
agreements between them with respect to North’s employment.


 


5.02         This
Agreement shall bind and be for the benefit of the parties to the Agreement, as
well as their respective successors, heirs and assigns, it being understood,
however that this Agreement may be assigned only with the written consent of both
parties.


 


5.03         The
existence and effectiveness of this Agreement between the parties hereto does
not preclude or otherwise interfere with employment of North by subsidiary
corporations of Cap Rock Energy Corporation, or by any corporation organized by
the Company’s Board of Directors for the benefit of the Company, or the receipt
of compensation by North from any such corporations.


 


5.04         This
Agreement shall become binding upon the parties from an as of the date of the
execution.


 


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IN WITNESS WHEREOF, the parties
have executed this Agreement in duplicate originals, one being retained by
each, on or as of the 12th day of September, 2001.


 


 


	
   

  	
  CAP ROCK ENERGY CORPORATION

  
	
   

  	
   

  
	
  By:

  	
  /s/ Ulen A. North, Jr.

  	
   

  	
  By:

  	
  /s/ David W. Pruitt

  
	
  Ulen A. North, Jr.

  	
  David W. Pruitt, CEO

  
					



 


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  STATE OF TEXAS

  	
  )(

  
	
   

  	
  )(

  
	
  COUNTY OF MIDLAND

  	
  )(

  



 


This
instrument was acknowledged before me on this 12th day of September,
2001, by DAVID W. PRUITT, President/Chief Executive Officer of Cap Rock Energy
Corporation, a Texas corporation, on behalf of said corporation.


 


	
   

  	
  By:

  	
  /s/ Sharon A. Hoelscher

  	
   

  
	
   

  	
   

  	
  Sharon A. Hoelscher

  
	
   

  	
  Notary Public, State of Texas

  	
   

  
	
   

  	
  Printed Name of Notary: 

  	
  /s/ Sharon A. Hoelscher

  	
   

  
	
   

  	
  My Commission Expires:

  	
   7/11/03

  	
   

  
									



(SEAL)


 


	
  STATE OF TEXAS

  	
  )(

  
	
   

  	
  )(

  
	
  COUNTY OF GRAYSON

  	
  )(

  



 


This
instrument was acknowledged before me on this 12th day of September,
2001, by ULEN A. NORTH, JR.


 


	
   

  	
  By:

  	
  /s/ Sharon A. Hoelscher

  	
   

  
	
   

  	
   

  	
  Sharon A. Hoelscher

  
	
   

  	
  Notary Public, State of Texas

  	
   

  
	
   

  	
  Printed Name of Notary: 

  	
  /s/ Sharon A. Hoelscher

  	
   

  
	
   

  	
  My Commission Expires:

  	
   7/11/03

  	
   

  
									



 


(SEAL)


 


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